Metropolitan Bank had its first profitable month in October six months ahead of schedule and expects to have its first profitable quarter at the end of the year.

In the banking world these days, such a pronouncement is rare; for an 18-month-old start-up bank, it’s extraordinary.

Triumph Bank chairman Lane Carrick, whose bank is a competitor that’s headquartered just down Poplar from Metropolitan’s office in East Memphis, can’t say enough good things about the upstart Metropolitan and his counterpart there, Curt Gabardi.

Gabardi was West Tennessee president for Regions Bank and left in 2007 following the AmSouth Bank acquisition. A year later, Metropolitan was born.

From the $60 million asset bank Gabardi’s investor group acquired in Crystal Springs, Miss., Metropolitan has grown to $385 million in assets, including $248 million in loans. It has $180 million in deposits just in Memphis, which would put it among the top 20 banks in market. And now it’s profitable to boot.

Carrick’s clearly impressed.

“Curt’s a great banker, just plain and simple,” says Carrick. “It’s fair to say Curt, in the Regions system, was a superstar.”

Under his leadership, Gabardi put together a board and business plan that was highly specific and very targeted toward serving commercial businesses and banking high net worth individuals, Carrick says.

“Fundamentally, they are almost the anti-retail bank,” he says.

In fact, Metropolitan has grown the bank in Memphis, which has the lion’s share of deposits and loans for the bank, from its one branch in the Legacy Center in East Memphis and a wrapped Mini Cooper that zips around town picking up and delivering deposits, documents or whatever customers need.

The five-year goal when the bank was first announced was for assets to be in the area of $600 million-$800 million. That’s now been elevated to $1 billion in assets and $100 million in capital, Gabardi says.

Metropolitan actually benefited from the economic recession and credit crunch that stymied many of its competitors, Gabardi says.

“Clearly a lot of banks are deleveraging and shrinking their portfolios,” he says.

Metropolitan was successful in raising $41 million in equity capital just before the economy crashed. It managed to preserve 97% of that before the bank made its first profit.

“Most new banks take three to five years to break even,” he says.

Having that capital and a lean operation helped put the bank in a lending-ready mode, he says.

Combine that with a team of bankers he culled largely from Regions operations both in Memphis and Jackson, Miss., who brought sizable books of business, and success was imminent, says Lannie Mitchell, president of Landreth Mitchell Consulting LLC, who has known Gabardi for years and worked with him at Regions.

“Curt recruited a team of bankers who had loyal followings,” Mitchell says. “Everyone had years of experience and a book of customers who would follow them wherever they went.”

And starting with a fresh slate, a clean balance sheet can’t be underestimated, Gabardi says.

Instead of devoting precious capital to a loan loss provision — as of Sept. 30 Metropolitan’s provision for loan losses was just over $1 million — or worrying about workout plans for bad or iffy loans, the bank is focused on generating business, says Phillip May, Metropolitan’s Tennessee president.

Almost $300,000 for two consumer loans, holdovers from Bank of the South, the bank Gabardi and his group bought, has been charged off.

“As for Memphis, we have zero non-performing or past due loans,” May says.

That strength has come in handy when Metropolitan’s bankers go to recruit new business.

“To be able to tell our story about local decision making and the expertise we have in commercial and industrial as well as private banking, that resonates with business owners,” May says.

Carrick believes that message may well resonate with another Memphis bank and that a merger between Metropolitan and a competitor can’t be far off.

“I think every bank in Memphis is talking to every other bank in Memphis,” he says.

He doesn’t outright dispel a potential merger with Triumph, but he notes that two banks have some obvious differences, including Triumph’s model than leans more toward retail.

Triumph currently has three branches and would like a fourth.

That said, there’s much to be said for a model like Metropolitan with low costs and a limited branch network, Carrick says. There are not a lot of banks that fit that model, but he expects one will emerge.

“I think Curt will have a lot of choices, I’ll put it that way,” Carrick says.

From Gabardi’s perspective, that’s clearly a part of the thinking right now. That’s the only way for the Memphis banking market to improve, he says.

He expects the next 12 months to be telling, for not only Memphis but Metropolitan.